Cell replacement therapy for Parkinson's disease has predominantly focused on ectopic transplantation of fetal dopamine (DA) neurons into the striatum as a means to restore neurotransmission, rather than homotopic grafts into the site of cell loss, which would require extensive axonal growth. However, ectopic grafts fail to restore important aspects of DA circuitry necessary for controlled basal ganglia output, and this may underlie the suboptimal and variable functional outcomes in patients. We recently showed that DA neurons in homotopic allografts of embryonic ventral mesencephalon (VM) can send long axonal projections along the nigrostriatal pathway in order to innervate forebrain targets, although the extent of striatal reinnervation remains substantially less than can be achieved with ectopic placement directly into the striatal target. Here, we examined the possible benefits of using younger VM donor tissue and over-expression of glial cell-derived neurotrophic factor (GDNF) in the striatal target to improve the degree of striatal innervation from homotopic grafts. Younger donor tissue, collected on embryonic day (E)10, generated 4-fold larger grafts with greater striatal targeting, compared to grafts generated from more conventional E12 donor VM. Over-expression of GDNF in the host brain also significantly increased DA axonal growth and striatal innervation. Furthermore, a notable increase in the number and proportion of A9 DA neurons, essential for functional recovery, was observed in younger donor grafts treated with GDNF. Behavioural testing confirmed functional integration of younger donor tissue and demonstrated that improved motor function could be attributed to both local midbrain and striatal innervation. Together, these findings suggest there is significant scope for further development of intra-nigral grafting as a restorative approach for Parkinson's disease.